Buying happiness
There’s a semi-famous paper by Dunn, Gilbert and Wilson: “If money doesn’t make you happy, then you probably aren’t spending it right”. (Proper reference: Dunn, E.W., Gilbert, D.T., and Wilson, T.D., If money doesn’t make you happy, then you probably aren’t spending it right, Journal of Consumer Psychology, vol 21, issue 2, April 2011, pp. 115–125.) It’s been referenced a few times on LW but curiously never written up properly here. The purpose of this post is to remedy that.
There is an earlier LW post called “Be Happier” which among other things references this paper and quotes some things it says, but that post is monstrously long and covers a lot more ground (hence, less details on the material in this paper).
Dunn, Gilbert and Wilson (hereafter “DGW”) offer eight principles to follow. Here they are.
1. Buy experiences instead of things.
Many studies have asked people to reflect on past “material” and/or “experiential” purchases and have consistently found that they report greater happiness from (and are made happier by recalling) the latter than the former.
Why? DGW propose 5 reasons. First, deliberately sought-out experiences encourage us to focus on the here and now (something shown to increase happiness substantially); second, when things don’t change we adapt to them rapidly, and “material” purchases like cars and tables tend to be pretty stable (whereas ongoing experiences are more varied); third, it turns out that people spend more time anticipating experiences before they happen and recalling them afterwards than they do for material purchases. Fourth, experiences are less directly comparable to alternatives than material things, and therefore less subject to post-purchase regret. Fifth, experiences are often shared, and other people are a great source of happiness.
2. Help others instead of yourself.
Prosocial spending correlates better to happiness than personal spending. If you give random people money and either tell them to spend it on themselves or to spend it on someone else, the latter makes them happier. Reflecting on past spending-on-others makes people happier than reflecting on past spending-on-self. (I am a little skeptical about that one: the right point of comparison would be not the past spending but the past enjoyment of whatever you spent the money on.)
Why? DGW propose two reasons. First, prosocial spending is good for relationships and relationships are good for happiness. Second, when you spend on someone else you get to feel like a good person.
Most people have wrong intuitions about this: they expect spending on themselves to make them happier. Most people are wrong.
3. Buy many small pleasures instead of few big ones.
As we saw above under #1, we quickly adapt to changes. Therefore, a larger number of varied small pleasures may be a better buy than a single big one. There is some evidence for this (though to my mind it seems to bear less directly on DGW’s principle than in the other cases we’ve considered so far). If you correlate people’s happiness with their positive experiences, the correlation with how frequent those experiences are is stronger than the correlation with how intense they are. The optimal (for happiness) number of sexual partners to have over a year is one, perhaps because that gets you more sex even if individual instances are less exciting. (I find this less than convincing; individual instances might be better because partners learn what works well for them.)
The other reason DGW suggest why more smaller things should be better is diminishing marginal utility: half a cookie is more than half as good as a whole cookie. (This is, I think, partly because of adaptation, but that isn’t the whole story.)
DGW suggest that this is one reason why the relationship between wealth and happiness isn’t stronger: “wealth promises access to peak experiences, which in turn undermine the ability to savor small pleasures”.
4. Buy less insurance.
We adapt to bad things as well as good, which means that bad things are less bad than we are liable to expect. Our overestimation of the impact of adverse occurrences is one reason why we buy insurance, which notoriously is always negative-expectation in monetary terms.
DGW cite various studies showing that people expect to be made markedly unhappier by losses than they actually are if the losses occur, and that people expect to regret bad outcomes more than they actually do (we overestimate how much we will blame ourselves, because we underestimate how good we are at blaming anything and anyone else for our misfortunes).
5. Pay now and consume later.
The opposite of the bargain proposed by credit cards! Besides the purely financial problems that arise from overspending (which are large and widespread), DGW suggest that “consume now, pay later” is bad for our happiness because it eliminates anticipation. We may derive a lot of pleasure even from anticipating something that we don’t enjoy very much when it happens. “People who devote time to anticipating enjoyable experiences report being happier in general.”
You might think that moving an experience later would simply mean more anticipation (good) but less reminiscence (bad), but it turns out that anticipation generally brings more happiness. (And, for unpleasant events, more pain.)
DGW suggest two other benefits of delaying consumption. First, we may make better choices (meaning, in this case, ones yielding more happiness overall, even if less in the very short term) when we make them a little way ahead. Second, the delay may increase uncertainty, which may keep attention focused on the thing we’re buying, which may reduce adaptation. (This seems a little convoluted to me; DGW cite some research backing it up but I’m not sure it backs up the “by reducing adaptation” part of it.)
6. Think about what you’re not thinking about.
That is: when choosing what to spend on, take some time to consider less obvious aspects that you’d otherwise be tempted to neglect. “The bigger home may seem like a better deal, but if the fixer-upper requires trading Saturday afternoons with friends for Saturday afternoons with plumbers, it may not be such a good deal after all.” And: “consumers who expect a single purchase to have a lasting impact on their happiness might make more realistic predictions if they simply thought about a typical day in their life.” (Rather than considering only the small bits of that day that will be impacted by their purchase.)
7. Beware of comparison shopping.
Comparison shopping, say DGW, focuses attention on the features that most clearly distinguish candidate purchases from one another, whereas other more-common features may actually have much more impact on happiness. It may also focus attention on more-concrete differences; for instance, if you ask people whether they would more enjoy a small heart-shaped chocolate or a large cockroach-shaped one, they generally prefer the former, but if you ask them to choose one of the two they tend to focus on the size and choose the latter.
DGW also point out that the context during comparison-shopping tends to be different from that during actual consumption, which can skew our evaluations.
8. Follow the herd instead of your head.
DGW cite research supporting de la Rochefoucauld’s advice: “Before we set our hearts too much upon anything, let us first examine how happy those are who already possess it.” Others’ actual experiences of a thing are likely to be better predictors of our enjoyment than our theoretical estimates: we may know ourselves better, but they know the thing better.
They also suggest (and I don’t think this really fits their heading) looking to others for advice on how we would enjoy something we are considering buying. The example they give is of research in which subjects were shown some foods and asked to estimate how much they would enjoy them, after which they ate them and evaluated their actual enjoyment. The wrinkle is that they were also observed, at the moment of being shown the foods, by other observers, who rated their immediate facial reactions—which turned out to be better predictors of their enjoyment than the subjects’ own assessments. So “other people may provide a useful source of information about the products that will bring us joy because they can see the nonverbal reactions that may escape our own notice”.
I don’t understand the downvotes on this post. But I presume that they are all from the notorious gjm hater who has been downvoting all of his comments.
I would assume so. On recent form the most likely outcome is that it gets just enough downvotes to keep it below zero.
On the upside, some day the LW admins are going to figure out a good way to undo all Eugine’s votes, and then I get to keep not only whatever upvotes my comments and posts have earned on their merits, but also any where someone saw something of mine sitting at −1 and thought “nah, that should be at zero”...
Aha!
So you’re downvoting your posts with sock puppets to cash in on anti karma bombing sentiment. Clever.
Yes, assuming the info in this article is accurate, this article is perfect for LW.
Gjm, this is a high quality post. Please keep up the good work.
On the one hand, I upvoted this because there is no reason for this post to be in the negatives.
On the other hand, I don’t think I’m a fan of the advice DGW are giving out.
On the third tail, this is because I’m trying it on for myself and it fits just terribly.
On the fourth twitching tufted ear, I have no illusions about being typical, so “doesn’t work for me” certainly does not imply “doesn’t work for normals”.
On the fifth tentacle, I continue to have doubts about this advice even for the normals.
So, follow the herd and don’t comparison shop? I would love to be your retailer. Especially if you want to pay now and consume later.
I also suspect (without having read the paper, natch) the authors’ methodology. Let me illustrate—let’s take the first point, “buy experiences”. Alice and Bob live in pretty identical circumstances. Both have a car that’s old, cranky, breaks down a lot, and tends to need expensive repairs. Both have some savings.
Alice goes YOLO!!! and goes on a Caribbean vacation. Returning from it, she continues to curse at her car and suffer from its slings and arrows. Bob uses his saving to buy a new(er) car.
In a bit, DGW show up. They ask Alice—did spending your savings make you happy? She says yes, fuck yes, that was an awesome vacation, especially compared to how crappy the life now is. They ask Bob—did spending your savings make you happy? Bob says well, kinda, not really, the new car is highly useful, but it’s not like it is the high point of his life.
And so DGW happily go and tell the world to buy experiences.
Reminds me of the classic quote: “I spent a lot of money on booze, birds and fast cars. The rest I just squandered.”
But the invisible to DGW opportunity costs can be… problematic.
Seconded.
I don’t see why anyone would downvote a post that does a great job at summarizing conclusions of a paper, even if they don’t agree with the content of said paper.
I think the community is hurting itself by punishing the effort gjm put into writing this, and he doesn’t even say anywhere that he supports these findings personally.
It’s not “the community”. It’s The Artist Formerly Known As Eugine_Nier and his army of sockpuppets.
(Therefore, by the way, I don’t feel punished by the downvotes. One consequence of Eugine’s behaviour is that I now assume almost all downvotes I get are Eugine being Eugine and convey zero information about the actual quality of what I’ve written. He’s therefore made it almost impossible for anyone actually to change my behaviour or hurt my feelings by downvoting me. But at this point I’m not sure he has any actual coherent goals in his downvoting. It’s more like a habit, or a scream of rage.)
I guess you can assume that EN auto-downvotes by X and just adjust the origin down by that amount… eg your comment is at −8 - which (assuming EN downvotes by −10) means it’s actually really at +2
I agree with your suspicions about material versus experiential purchases, for similar reasons. (It’s a similar objection to the one I raised about their buying-for-self versus buying-for-others arguments.)
What you’d really need to do to assess this is give a few hundred people $1000, tell half of them to spend it on something material and half to spend it on something experiential, and then do experience-sampling on them all for the following 5 years or so to assess their happiness. Oh, and for the previous year or so too. It isn’t hard to see why no one has done that particular piece of research.
I’m not so convinced they’re wrong about “buy now, consume later” (though “plan now, buy later” seems like it might be better), or by “follow the herd” or “don’t comparison-shop”, at least if they’re taken to mean “follow the herd more” and “comparison-shop less”. (Yup, those might make things better for retailers too. But, y’know, the whole point of trade is that it isn’t zero-sum.)
It’s possible to debate the pros and cons of each suggestion, but I think that what rankles me is the overall theme of shortsightedness. Be a happy little sheep, live day by day without worries about far future, don’t deviate from the herd, don’t worry your pretty little head about trying to optimise things....
It could very well be that being more shortsighted really does make you happier. Or that lots of moves in the shortsighted direction lead to greater happiness although some don’t (e.g., saving more may well be a win[1] if you look at the reasonably long term).
[1] I hope it is...
It seems like the methodology of many of the studies they cite systematically neglects long-term effects. That’s probably at least partly because long-term effects are harder to measure—and make the study more expensive to do and take longer before you get to publish it. It seems likely that there’s a general short-term bias in this sort of research.
That advice goes back to at least Jesus.
However at this point I will have to ask “Make whom happier?” People are different (and in a high-dimensional space, too) so producing this kind of advice for an average human is both useless and misguided. I would believe it more if it came conditional on certain personality characteristics, for example.
By the way, who were the subjects of DGW questionnaires? The usual WEIRD people?
I bet (p=0.8) there’s something along those lines predating Jesus in the Buddhist tradition.
Yes, different people will be made happy by different things. The studies DGW cite were mostly done by other people rather than by DGW. I share your suspicion that too many of the subjects were young healthy well-off well-educated Western psychology students or the like.
I wouldn’t be surprised.
With a tiny bit of effort you can drag Ecclesiastes in here, too (not on the side of enjoy the here and now, but on the side of planning and effort are futile).
At least back to 23 BC.
Carpe diem is more a predecessor of Nike’s Just Do It, rather than “Therefore do not worry about tomorrow”.
That might be what it has become in present-day popular culture, but the line in the original poem did continue with “quam minimum credula postero”.
One should probably distinguish between buying things for what they can do and buying things just to have them.
This is advice for cheapos like me.
Plan to Throw Money at Problems
What if this? What if that? Blah blah blah. When I find myself fretting over something, I ask myself “So if the Bad Thing happens, what would it cost to fix?” Usually, just not a big deal in financial terms. All sorts of problems just evaporate if you hand someone a wad of cash.
If it’s Cheap, Just Buy It
Don’t fuss and fret over a few dollars. Buy it and move on. Even if you’re not fussing or fretting, if you’ve come back to a purchase multiple times, you obviously want it.
Especially if it’s completely silly.
There are all sorts of inane, childish things we want. When a kid, me and my friends played trumps with Dallas Cowboy Cheerleader cards. This made the game more interesting, as the point was to collect the most attractive Cheerleaders. (Sexist, horrible, blah blah blah). I thought about that one day, and tried to dredge up the Cheerleaders in my mind, and didn’t do to well. $15 and a few clicks at Ebay, and shazam!, I got the cards in the mail a week later and was reminiscing on the old days. Completely silly, but worth the $15.
The best things I’ve bought have been good because they created good experiences while using them. So I wondered if the authors restricted ‘things’ to those that don’t generate use-experiences and kind of work in the background, or if there’s another distinction I’m missing.
For instance, I recently bought an expensive new set of speakers. They’re very shiny and prestigious and luxurious. But the real reason I love them is that I’ve had some amazing experiences listening to music through them, which I also remember and cherish while away from them.
Certainly there are pure experential purchases, which don’t leave material possessions after the experience ends, like buying tickets to a movie. I found it harder to think of pure material purchases which don’t generate experiences.
Also, many material purchases are made not to generate good experiences, but to eliminate bad ones: I bought a dishwasher to stop washing dishes. Now that it’s here I don’t think about it much, which means it’s working well. Asking people for happiness without asking for lack-of-unhappiness ignores such purchases.
So I looked at what the paper says:
In the example quoted later in the article, people were “asked to think of a material and an experiential purchase they had made with the intention of increasing their own happiness [and] asked which of the two purchases made them happier”. I think there would have been all kinds of confounders and biases involved. And the question itself assumes a bimodal distribution of purchases (material and experiential).
I don’t have access to the full texts of the references, but from this summary I don’t get the impression this is well founded.
Yes, I think these are good criticisms. FWIW I suspect people do tend to undervalue experiential purchases relative to material ones, but I agree that the research purporting to show this seems insufficiently careful.
Probably has more to do with the kinds of people that define purchases as experiences vs merely material.
Authors don’t appear to talk about reverse causation at all. Still worth cargo culting on the cheap and easy wins. See also this infographic: http://happierhuman.com/how-to-be-happy/
I see “Go to church”, “Don’t watch porn”, “Don’t ruminate”, “Don’t fantasize”. And WTF is “Don’t rely on marriage”?
I’ll pass.
I think that was the point: these things are correlated with higher (self-reported) happiness, but that doesn’t mean they cause it.
The link explicitly says:
Blargh.
I meant I read RomeoStevens as intending the link as an an example of some obviously correlation-not-causation cargo-cultish stuff.
But he thinks that “still worth cargo culting on the cheap and easy wins” which implies he believes the causation even if he’s treating the mechanism as a black box.
I took his meaning to be: it’s hard to figure out what causes what, but if X is associated with greater happiness and is easy to do, I might as well do X even though it might turn out it’s a consequence rather than a cause.
Great review, Gareth. I found #8 especially interesting.
I wonder about this:
The so-called impact bias is certainly a thing (I hope to write on it soon for many reasons; I don’t think it’s been treated on LW), but I wonder if that’s not too precise of a bet to be making on the mechanism by which that occurs, at this point, although I’ll note that I haven’t read the source paper.
Also, I see that there have been some pretty substantial criticisms made (against the original source) by the commentariat (I found this cool/impressive); maybe it would be interesting to include an addendum with the good ones included?
And I assume this is a typo:
I imagine you meant to write ‘when’.
What I’m actually intending to do, once it seems like we have all the major criticisms we’re going to get, is to add comments inline after the summary of what DGW say about each principle. I think that’s a little better than an addendum at the end.
I did. I’ll fix it. [EDITED to add: Now fixed. Thanks.]
When my grandfather died, they would have sold his library, but Mother put her foot down and we had it sent to us instead. Simply mailing it cost (us) more than €1000 - a sum wonderfully outside my experience of directly spending—and on the border we had to unload the boxes and show the books to customs officers. Grampa’d really liked his swashbucklers, too, so the officers were probably impressed… Anyway, that day I learned to enjoy as much as possible out of buying experiences, helping others, and paying now—consuming later… It just helps, ok?:)
Slightly of topic, but relevant. Nothing in this nor any of the comments mentions what percent of your “happiness level” might be expected to come from a form of spending money. Presumably, some significant percentage of your happiness comes from things that do not directly involve spending money.
You cannot have a true idea of how much happiness money can buy if you do not adjust (downward) the value of money-bought-happiness based on the fact that it will account for only a portion of your happiness pie chart. Most of us do this to some extent, automatically weighing in the value of an extra hour of sleep or hour of unstructured family time into our happiness calculations, but if you are looking to maximize your happiness you should look at non-money sources of happiness as rigorously as you do moneyed.